Dendreon, the once-promising Seattle biotechnology company, is taking it on the chin today after announcing a restructuring that will cost more than 600 people their jobs; the closure of its manufacturing facility in Morris Plains, New Jersey and other cost-cutting measures.
“This restructuring sets a new course forward for Dendreon, accelerating our path to profitability and future growth,” said CEO John H. Johnson in a statement. “Since we first launched PROVENGE, we have continued to look for ways to improve the methods of producing and distributing the first autologous cellular immunotherapy for cancer more efficiently. With efficiency gains in plant utilization, we can now reconfigure our manufacturing network to lower costs across our organization, while continuing to deliver the same quality product and high levels of service our customers expect from us. With the planned improvement in operations, we believe the new network will have similar capacity as that of our three plants currently, and anticipate that it allows the company to meet expected future demand and growth.”
Dendreon’s shares fell nearly 20 percent in after hours trading. They are down 83 percent in the past year. As a result of the restructuring, the company expects costs to be reduced by about $150 million annually. It had previously employed about 1,475 employees.
Separately, Dendreon announced results for the quarter ended June 30, showing product revenue of $80 million and a net loss of $96.1 million. That compared to product revenue of $48.1 million and a net loss of $116 million for the same period last year. The company finished the quarter with $509.7 million in cash, cash equivalents and short-term and long-term investments